Hemmed into a corner

You know the story. A Canadian clothing company moves to Central America and gets ensnared in allegations of worker rights violations. Activists crack down. The factory announces it's shutting its doors. End of story. So why are so many prominent NGOs, universities, sweatshop activists and even corporations holding their collective breath?

Turns out this narrative gets a little complicated when the company, Montreal based T-shirt giant Gildan (which quietly knocked Fruit of the Loom from its blank-T-shirt-industry throne years ago), is big on pushing its social responsibility image. It had joined a corporate monitoring org - the Fair Labor Association (FLA) - not long before to demonstrate its commitment, and had even agreed to investigations into allegations of workers' rights abuses at the factory in question in Honduras.

It all looked good for the labour rights community, which had leveraged the probe with a wave of consumer pressure. Hundreds of universities, colleges and NGOs with memberships in monitoring organizations or with their own purchasing codes of conduct waited for Gildan's next move before buying new shirts.

Then, suddenly, months into the investigation and weeks before the FLA was to release its report, Gildan announced it was closing the factory. All eyes turned to the body that launched the investigation. Would the Washington-based FLA, composed of notorious sweatshop felons like Nike and Reebok as well as NGOs and universities, for the first time in its relatively short history suspend a corporate member (in fact, its first and only Canadian member)?

Concerns subsided when the FLA passed what many observers were calling its big test: late last week it issued a press release asserting that Gildan is now on three-month probation. But if this is the outcome activists were fighting for, why, then, is the celebration so muted? ***

Despite its efforts to portray itself as a leader in corporate social responsibility, Gildan is no stranger to sweatshop controversy. Forced pregnancy tests and the firing of workers attempting to unionize at the El Progresso plant in Honduras made headlines back in early 2002. Gildan fiercely denied the allegations, insisting workers were coached to complain. But as new, more detailed reports were released about abuses and mass firings of workers involved in trying to organize the plant, consumer scrutiny kicked into high gear. Many NGOs that had purchased from Gildan because the company still had unionized plants in Canada (although one of those closed soon after unionization) and had even received an aid agency award for some of its work in Central America cancelled all further orders.

Council of Canadians was one of them. Amnesty International and Oxfam stopped short of a boycott but suspended purchases, demanding clear answers before buying any more. Several NGOs, as well as Gildan purchaser University of Toronto, encouraged the increasingly troubled company to join the FLA. And in fall 2003 it did - right before another wave of union member firings hit.

Two months later, the Toronto-based Maquila Solidarity Network, the Canadian Labour Congress and the Independent Federation of Honduran Workers filed formal complaints with the FLA and university and college monitoring group the Worker Rights Consortium (WRC), sparking both organizations to carry out independent but concurrent investigations.

This brings us to where we are today. Last week, both groups issued damning reports corroborating claims that rights to freedom of association were indeed violated and workers unjustly fired. Both call for remediative action, including the reinstatement of fired workers and public commitments to supporting freedom of association. Gildan's FLA membership is on the line if it doesn't take corrective action. Only trouble is, in two months the factory's doors will close. Oddly, there's little either org feels it can do about that.

"We are concerned that there may be a very direct relationship between the effort to compel Gildan to address violations of workers' rights with respect to unionizing rights in this factory and its decision to close," says Scott Nova, head of the WRC. And while the WRC's report questions Gildan's claims that the two are unrelated, Nova adds, "It's very difficult to prove one way or another."

Rutledge Tuft, executive director of the FLA, acknowledges that the closure undermines the whole process and is in fact a common tactic used by many in the biz to escape unions. But strangely, Tuft also seems resigned to the reality. "(The closure) makes it difficult to achieve remediation (and) build on a sense of trust and credibility for all involved. But we certainly don't have the authority to require them to stay open." Even if it did, Tuft says the FLA doesn't have the capability to prove conclusively that Gildan ditched the plant to evade ongoing union troubles and auditing woes.

For its part, Gildan says its reasons were purely economic. The factory, it says, was inefficient because it produced too many types of clothing, unlike its usual single-item plants. It also claims regular road closures cut off supplies and choked production.

"All of this has nothing to do with the audits that were going on," says Stephen Lemay, VP communications at Gildan. "If you read the reports, there is nothing in there that is significant enough to force us to take such a difficult decision."

"The point you have to realize," adds Lemay, "is that we are the only company in our industry subjecting ourselves to such scrutiny.... Our competitors (don't) go to the FLA, because they know they wouldn't meet the test."

Regardless, the Maquila Solidarity Network is demanding that the factory stay open, condemning the closure as a betrayal of workers, who are convinced it's a reprisal for talking to investigators. "They took a risk by being willing to talk honestly to the auditors from the FLA and the investigative team from the WRC, with the understanding that they weren't going to suffer consequences for doing so," says MSN's Bob Jeffcott, who notes that workers are already being blacklisted by the entire industrial park. "For the company to shut the door on them after they take that risk is totally unacceptable and irresponsible."

But of even greater concern to Jeffcott is the precedent it sets for the rest of the apparel industry. "We want to make sure companies don't use this as an excuse to get rid of factories where workers complain about conditions or try to organize to improve conditions."

Not that they'll be getting much help from the FLA. The temporary probation is likely to be lifted once Gildan complies with the group's remediation plan, which Gildan already claims to be moving on. Failing that, come October the FLA could decide to put Gildan on probation for another 90 days, according to Tuft. Not quite the kind of decisive action that keeps an incorrigible industry in line.